- EUR/JPY created an inside bar on Wednesday, signaling seller exhaustion.
- A close above 119.27 is needed to confirm a bullish reversal.
EUR/JPY created an inside bar pattern on Wednesday, which occurs when a specific period's high and low falls within the trading range of the preceding period.
The pair hit a high and low of 119.27 and 117.78, respectively, on Wednesday. The trading range fell within the high and low of 119.59 and 117.68 hit on Tuesday.
The inside bar candlestick pattern represents consolidation. However, in EUR/JPY's case, the pattern has appeared following a notable sell-off and represents bearish exhaustion and an impending bearish-to-bullish trend change.
That said, the trend reversal would be confirmed only if the spot closes today above the inside bar's high of 119.27.
That looks likely, as both the 14-day relative strength index and the moving average convergence divergence histogram are reporting a bullish divergence.
- R3 120.44
- R2 119.87
- R1 118.92
- PP 118.35
- S1 117.4
- S2 116.83
- S3 115.88
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.